The Great Hollowing-Out: AI and the Junior Role Crisis

[erronis]

https://gradientflow.substack.com/p/the-ai-doom-loop-is-here

I’m coming across more articles about the looming impact of AI on jobs, and many paint a particularly dire picture for recent college graduates and young professionals. The data, unfortunately, reinforces this narrative. For the first time in over 45 years of recorded data, the unemployment rate among recent college graduates has inverted, now standing between 5.8% and 6.6% — significantly higher than the national average of around 4%. This isn't just a statistical blip; it's a structural shift affecting even elite institutions. Between 2021 and 2024, the share of Stanford Business School graduates with a job three months after graduation fell from 90% to 80%.

The anecdotes behind these metrics are just as telling. Entry-level job postings in the U.S. have fallen more than 20% below pre-pandemic levels, while senior roles have actually increased. The job search has become a high-volume, low-response ordeal. One computer science graduate documented applying to over 5,000 tech positions, which resulted in only 13 interviews and zero offers. Graduates from top-tier schools like Cornell and Boston College, armed with strong academic records and prestigious internships, report sending out 150 to 200 applications with minimal success, often receiving automated rejections within minutes. The data indicates that this is a structural transformation of the entry-level market, not a temporary fluctuation.

The signs that AI is reshaping the employment market for young professionals are becoming too clear to ignore. The impact is particularly acute in sectors that were once seen as reliable paths to a stable career. Tech companies, for instance, have cut the share of entry-level positions in their hiring by half since 2019. Today, recent graduates account for just 7% of their new hires. This trend is driven by a fundamental change in corporate philosophy, crystallized by Shopify’s CEO in a directive to his company: "No more new hires if AI can do the job." This isn't just happening in tech; major financial institutions like DBS Group are planning to eliminate thousands of positions through AI adoption.

This corporate transformation has created a difficult paradox for job seekers. The application process has devolved into what some call an "AI doom loop," where candidates use AI to mass-apply and companies use AI to mass-reject, often without any human review. UK employers now receive an average of 140 applications for every graduate position, a 59% surge in just one year. At the same time, employers are raising their standards. A recent Deloitte survey found that 61% of employers have increased experience requirements for entry-level roles over the last three years, creating an impossible catch-22: young professionals cannot get a job without experience, but the very roles that once provided that experience are disappearing.



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[jmbar2]

1. Combined with the race to outsource to H1Bs, and the immediate future looks grim for our best and brightest

I hope that by applying their massively underutilized skills and intelligence, that they can find ways to do end-runs around the corporations. Create alternative goods and services that people will happily choose to say FU to the oligarchs.

In my locale, there is a chain of employee-owned grocery stores called Grocery Outlet with very favorable franchise terms. I'd love to see young people band together, go into businesses like these, and then have the chance to patronize them to the detriment of the oligarchs.